Additional housing credit allocations for certain populations who face unique barriers to affordable housing

(a) In general Section 42 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection: (n) Additional allocation for units for certain populations who face unique barriers to affordable housing (1) In general A housing credit agency may allocate, in any calendar year, an amount equal to 5 percent of the amount such housing credit agency may allocate under subsection (h)(3)(C) to projects which contain a unit described in paragraph (2). (2) Unit described A unit is described in this paragraph if— (A) such unit is part of a low-income housing project, (B) the housing credit agency and the owner of such unit, not later than the first day of the second year of the credit period of such project, execute a compliance agreement, (C) the taxpayer prioritizes populations who face unique barriers to affordable housing for occupancy of such units, and (D) the taxpayer, in consultation with covered service providers, makes available to any resident of such unit appropriate supportive services during the compliance period. (3) Compliance agreement For purposes of paragraph (2)(B), the term compliance agreement means an agreement which— (A) requires the owner of a unit to submit to the housing credit agency for approval a supportive service plan for each calendar year during the compliance period, (B) requires the approval of the housing credit agency with respect to any agreement between such owner and any covered service provider relating to services provided pursuant to this subsection, and (C) allows the housing credit agency to monitor compliance with such agreement and with the requirements of this subsection. (4) Populations who face unique barriers to affordable housing For purposes of this subsection, the term populations who face unique barriers to affordable housing means individuals who are— (A) formerly justice-involved individuals, (B) current or former foster youths, or (C) kinship caregivers. (5) Covered service provider For purposes of this subsection, the term covered service provider means any entity with demonstrated experience providing supportive services to populations who face unique barriers to affordable housing. (6) Formerly justice-involved individual For purposes of this paragraph, the term formerly justice-involved individual means an individual who faces barriers to obtaining housing as a result of being arrested, charged, or convicted of any criminal offense. (7) Current or former foster youth The term current or former foster youth means an individual who was eligible at any time to receive services under section 477(a) of the Social Security Act. (8) Not included in aggregate housing credit dollar amount An amount allocated under paragraph (1) shall not be included in the aggregate housing credit dollar amount for any calendar year of the State which made such allocation. (9) Enforcement The Secretary shall, in consultation with housing credit agencies, establish such mechanisms (including penalties) as the Secretary determines appropriate to ensure that— (A) each unit with respect to which a credit is allowed under paragraph (1) meets the requirements described in paragraph (2), and (B) each housing credit agency which makes an allocation under paragraph (1) is taking appropriate steps to enforce each compliance agreement to which such housing credit agency is a party under paragraph (3).. (b) Allocations allowed in addition to State ceiling Section 42(h)(1) of such Code is amended by striking the housing credit dollar amount allocated to such building under this subsection and inserting the sum of the housing credit dollar amounts allocated to such building under this subsection and subsection (n). (c) Effective date The amendments made by this section shall apply to calendar years beginning after 2026.